Sellers Dorsey Digest

Federal Updates

News

Increases in Home Health and Home Care Worker Hirings May Fall Short, If Proposed Medicare Pay Cut is Approved

• As the demand for home health and home care services increases, and in anticipation of CMS’ proposed 1.7% Medicare rate cut in 2025, many companies are struggling to offer attractive wages to bring in workers. Based on many companies’ second quarter earnings, higher wages may be a solution for meeting recruitment goals. A few companies, like Enhabit Home Health and Hospice, stated that preferred provider payments with Medicare Advantage (MA) organizations gave them the ability to boost wages and expand their workforce. Additionally, increased Medicaid reimbursement rates during the COVID-19 public health emergency likely helped many companies to increase hiring as well. However, the proposed Medicare rate cut has the potential to negatively affect the home health landscape, and many companies like the Pennant group will continue to fight CMS on the proposed rate cut (Modern Healthcare, August 12).

Federal Regulation and Guidance

HHS’ Proposed Rule Requires Health IT Contractors to Meet Data Exchange Standards

• On August 8, HHS’ Office of the Assistant Secretary of Financial Resources released a proposed rule, Acquisition Regulation: Information Technology; Standards for Health Information Technology, that requires healthcare entities that contract with the department to use HHS-adopted data exchange standards. The proposed rule provides that health IT must meet the Office of the National Coordinator for Health Information Technology (ONC) requirements when solicitations and contracts issued by or on behalf of HHS entities involve implementing, acquiring or upgrading health IT where individually identifiable health information is exchanged, and health IT is used by healthcare providers, health plans, or health insurance issuers under HHS contracts. The proposed rule also impacts healthcare providers eligible to participate in CMS’ health IT-focused incentive programs. Some health information technology stakeholders oppose the possible mandate for government health grantees to use government-certified information technologies, eliminating the option to independently choose information technology systems (Fierce Healthcare, August 12; Inside Health Policy, August 13).

Communication and Optimal Resolution (CANDOR) Programs Receive Support from CMS

• The Medicare and Medicaid Programs and the Children’s Health Insurance Program; Hospital Inpatient Prospective Payment Systems for Acute Care Hospitals and the Long-Term Care Hospital Prospective Payment System and Policy Changes and Fiscal Year 2025 Rates; Quality Programs Requirements; and Other Policy Changes final rule becomes effective on October 1, 2024 and requires hospitals to demonstrate they are implementing appropriate measures to advance and report patient safety, including implementation of CANDOR programs. CANDOR programs are designed to protect patient safety, require disclosure of medical errors, and encourage hospital staff to report safety concerns. To date, Colorado, Iowa, Minnesota, and Utah have enacted legislation permitting hospitals to use CANDOR or similar communication and resolution programs (The Standard Journal, August 12).

State Updates

News

Health Affairs Study Shows Variance in State Laws on Nurse Staffing Minimums

• An August 2024 Health Affairs study examines state legislation regarding nurse staffing minimums as of January 2024. The study found that 23 states do not have any statutes or administrative codes for these minimums and staffing minimum requirements in the remaining states vary widely. California and Oregon have the most detailed state policies and require specific staff-to-patient ratios for different hospital units. Arizona, Massachusetts, New York, Ohio, and Oklahoma only mandate ratios for one type of hospital unit. Eleven states have implemented staffing plans and eight states mandate nurse staffing committees. Five states without any staffing minimums have introduced legislation while Idaho has statutorily prohibited any minimum staffing ratios. However, in all states that require staffing minimums funding mechanisms are not addressed. According to the authors of the study, states should detail requirements on how funding should be acquired and spent to assist hospitals in reaching compliance with minimum staffing ratios. Last year, a bill introduced in the House by Democrats in the House Energy & Commerce Committee included minimum staffing ratios by hospital unit. CMS is currently embroiled in a lawsuit in Texas brought by the nursing home industry over the agency’s newly required staffing minimums, arguing that CMS overstepped its authority (Inside Health Policy, August 8).

Arkansas Fines Four PBMs Over Reimbursement Rates

• The Arkansas Department of Insurance is seeking to fine four PBMs for ignoring a state bulletin requiring PBMs to cease pharmacy reimbursements that are below national average drug acquisition costs. Caremark, Magellan, Express Scripts, and MedImpact may be liable for $5,000 per violation, amounting to $1.47 million. The Arkansas Insurance Commissioner and Governor have scheduled disciplinary action hearings relating to the fines, but no further information has been provided (Health Payer Specialist, August 9).

New York Governor Announces Recipients of Social Care Network Program Funding

• On August 7, New York Governor Kathy Hochul announced nine organizations statewide will receive a total of $500 million over the next three years to create a new Social Care Network (SCN) program as a part of its 1115 demonstration waiver, the New York Health Equity Reform waiver, approved by CMS in January. The SCN program is one component of a $7.5 billion three-year waiver with nearly $6 billion of federal funding to address health disparities in low-income communities by providing access to nutritional meals, housing supports, transportation, and other social services (Healthcare Innovation, August 9; New York State, August 7).

Florida Expected to Release Invitation to Negotiate for Children’s Medicaid Contract

• This week, Florida is expected to publish an Invitation to Negotiate for the Medicaid contract that covers individuals age 21 years and younger with medically complex diagnoses. The program provides services to approximately 87,500 enrollees, is worth approximately $2.1 billion annually, and is currently held by Centene’s Sunshine Health Plan. The current contract was procured in 2019 and expires in January 2025. There is no information available regarding how many health plans the state will award contracts or if any additional changes will be made to the contract (Health Payer Specialist, August 12).

SPA and Waiver Approvals

SPAs

• Payment SPAs
  • Connecticut (CT-23-0015, effective August 1, 2023): Updates procedure codes by adding two Screening, Brief Intervention and Referral to Treatment (SBIRT) CPT codes to Medical and Rehabilitative Clinic fee schedules and one CDT code to the fee schedules for children’s and adult’s dental services.
  • Montana (MT-24-0005, effective July 1, 2024): Implements provider rate increases and updates fee schedule dates for multiple state plan services.
  • Montana (MT-24-0009, effective July 1, 2024): Updates bundled composite rate for services provided in an outpatient maintenance dialysis clinic.
  • North Dakota (ND-24-0009, effective July 1, 2024): Implements inflationary increases for certain Inpatient Hospital Service payments.
  • Utah (UT-24-0010, effective July 1, 2024): Rebases and increases the state’s budget for multiple FFS non-institutional services.
• Services SPAs
  • Georgia (GA-24-0005, effective July 1, 2024): Expands covered medically necessary dental services for individuals over 21 to include diagnostic, preventative, periodontal, prosthodontic, orthodontic, endodontic, emergency dental services and inpatient and outpatient oral surgery.
  • Texas (TX-24-0004, effective February 1, 2024): Allows in-patient psychiatric hospital service providers within an institution of mental disease to be accredited by any CMS-approved accreditation organization for psychiatric hospitals.

Private Sector Updates

News

Walgreens May Sell Full Stake in VillageMD, Facing Significant Losses

• Pharmacy giant Walgreens is considering selling its full stake in primary care provider VillageMD following several years of heavy investments, according to documents filed with the U.S. Securities and Exchange Commission on August 7. In Fall 2023, Walgreens announced that it would close 60 under-performing clinics and exit five markets in hopes to achieve $1 billion in cost-savings. Now, VillageMD is expected to close an additional 100 clinics. Despite acquiring the urgent and primary care chain Summit Health-CityMD in 2022, VillageMD still faces profitability challenges. Walgreens posted a $6 billion loss in the second quarter of this year and this recent disclosure may be the start of the company’s reversal from the healthcare provider business (Fierce Healthcare, August 9).

Payers Introducing Mental Health Initiatives Post-Pandemic to Tackle Growing Adolescent Mental Health Crisis

• Following the COVID-19 pandemic, payers are introducing a variety of mental health initiatives, many aimed towards adolescents. A recent study on adverse childhood experiences (ACE) found that adults who suffered from these experiences had a higher utilization of healthcare services and healthcare costs were 26.3% higher than those who did not have these experiences. In 2021, ACEs have led to $292 billion more in aggregate healthcare spending. A few of the mental health initiatives introduced include: Point32Health’s integrated medical and behavioral health services for children on the autism spectrum, Centene’s Choose Tomorrow which focuses on suicide prevention and New Hampshire’s Anthem Blue Cross Blue Shield which provides in-home mental health services to enrollees age 12 years and up (Health Payer Specialist, August 12).

Home Care Software Company, AxisCare, Releases Medicaid Billing Solution

• AxisCare Medicaid Billing is the newest home healthcare solution from software provider AxisCare. This system aims to streamline Medicaid billing and claims processes for home care agencies, create more accurate claims, make it easier to comply with Medicaid regulations, and alleviate administrative burdenon home care agencies. AxisCare Medicaid Billing is currently only available in Arizona, Georgia, Idaho, Kansas, Louisiana, Minnesota, Mississippi, and South Dakota (Yahoo Finance, August 13).

Sellers Dorsey Updates

Gary Jessee Featured in HIT Consultant for Insights on Medicaid Managed Care Rule

• In his recent article with HIT Consultant, Sellers Dorsey Senior Vice President, Gary Jessee, dives deep into the final CMS Medicaid Managed Care Rule. Uncovering the rule’s various implications for stakeholders across the industry, Gary shares his insights on how it will change standards for access, finance, and quality within the Medicaid program. Explore Gary’s article here.